National Bureau of Economic Research Working PapersThe Latest NBER Working Papershttp://www.nber.org/new.html
The US Gains from Trade: Valuation Using the Demand for Foreign Factor Services -- by Arnaud Costinot, Andres Rodriguez-ClareAbout 8 cents out of every dollar spent in the United States is spent on imports. What if, because of a wall or some other extreme policy intervention, imports were to remain on the other side of the US border? How much would US consumers be willing to pay to prevent this hypothetical policy change from taking place? The answer to this question represents the welfare cost from autarky or, equivalently, the welfare gains from trade. In this article, we discuss how to evaluate these gains using the demand for foreign factor services. The estimates of gains from trade for the US economy that we review range from 2 to 8 percent of GDP.http://papers.nber.org/papers/w24407#fromrss
http://papers.nber.org/papers/w24407#fromrssBartik Instruments: What, When, Why, and How -- by Paul Goldsmith-Pinkham, Isaac Sorkin, Henry SwiftThe Bartik instrument is formed by interacting local industry shares and national industry growth rates. We show that the Bartik instrument is numerically equivalent to using local industry shares as instruments. Hence, the identifying assumption is best stated in terms of these shares, with the national industry growth rates only affecting instrument relevance. We then show how to decompose the Bartik instrument into the weighted sum of the just-identified instrumental variables estimators, where the weights sum to one, can be negative and are easy to compute. These weights measure how sensitive the parameter estimate is to each instrument. We illustrate our results through three applications: estimating the inverse elasticity of labor supply, estimating local labor market effects of Chinese imports, and using simulated instruments to study the effects of Medicaid expansions.http://papers.nber.org/papers/w24408#fromrss
http://papers.nber.org/papers/w24408#fromrssNAFTA and the Wages of Married Women -- by Shushanik Hakobyan, John McLarenUsing US Census data for 1990-2000, we estimate effects of NAFTA on US wages, focusing on differences by gender. We find that NAFTA tariff reductions are associated with substantially reduced wage growth for married blue-collar women, much larger than the effect for other demographic groups. We investigate several possible explanations for this finding. It is not explained by differential sensitivity of female-dominated occupations to trade shocks, or by household bargaining that makes married women workers less able to change their industry of employment than other workers. We find some support for an explanation based on an equilibrium theory of selective non-participation in the labor market, whereby some of the higher-wage married women workers in their industry drop out of the labor market in response to their industry's loss of tariff. However, this does not fully explain the findings so we are left with a puzzle.http://papers.nber.org/papers/w24424#fromrss
http://papers.nber.org/papers/w24424#fromrssA Swing-State Theorem, with Evidence -- by Ma Xiangjun, John McLarenWe study the effects of local partisanship in a model of electoral competition. Voters care about policy, but they also care about the identity of the party in power. These party preferences vary from person to person, but they are also correlated within each state. As a result, most states are biased toward one party or the other (in popular parlance, most states are either 'red' or 'blue'). We show that, under a large portion of the parameter space, electoral competition leads to maximization of welfare with an extra weight on citizens of the 'swing state:' the one that is not biased toward either party. The theory applies to all areas of policy, but since import tariffs are well-measured they allow a clean test. We show empirically that the US tariff structure is systematically biased toward industries located in swing states, after controlling for other factors. Our best estimate is that the US political process treats a voter living in a non-swing state as being worth 77% as much as a voter in a swing state. This represents a policy bias orders of magnitude greater than the bias found in studies of protection for sale.http://papers.nber.org/papers/w24425#fromrss
http://papers.nber.org/papers/w24425#fromrss